(Solution) If Apple Costs \$130 Today, Interest Rates Are 10%, And Apple Pays A \$3 Dividend Every Year, What Is The Fair Forward Price Of A Five-year Forward? | Snapessays.com

(Solution) If Apple costs \$130 today, interest rates are 10%, and Apple pays a \$3 dividend every year, what is the fair forward price of a five-year forward?

•If Apple costs \$130 today, interest rates are 10%, and Apple pays a \$3 dividend every year, what is the fair forward price of a five-year forward? •What would the fair forward price be if Apple’s stock price goes up to \$150? : (\$100 IBM price today, 2 year forward, 10% interest rates, \$5 dividend per year), suppose you bought the forward at the fair forward price of \$110.5. Now IBM falls to \$80. You want to get out. What is the most you would pay to get out of your forward contract struck at \$110.5?

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This question was answered on: May 23, 2022

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